How Do Your Business Systems Compare to Best-in-Class?
What makes a company best-in-class? Have you ever wondered how your business systems compare to those of top organizations? An Aberdeen study defines best practices for wholesalers and distributors in their ERP Benchmark survey. The research compares practices of high-performing companies to their peers. Aberdeen found some clear differences in their business practices.
The majority of wholesalers and distributors use an ERP system to drive their business operations. Distributors turn to enterprise software solutions in their business systems for three key reasons: to manage growth expectations, to improve decision making, and to reduce costs. These motivations were identified in the Aberdeen study:
- Need to manage growth expectations (41%)
- Delays in decision-making from lack of timely information (35%)
- Must reduce costs (32%)
- Interoperability issues across multiple operating locations (27%)
- Interoperability issues with customers and suppliers (27%)
A growth strategy requires process automation. As distributors add new locations, more countries, and new customers, they are finding that communication and workflow across functions has become increasingly disorganized. Automating processes in their business systems is a critical step in keeping costs under control and managing change.
Enterprise Software Strategies to Manage Growth
An ERP is an important part of any growth strategy. Enterprise software does more than just run operations and maintain data; it also provides visibility to management and promotes process standards throughout the entire organization. Best-in-class organizations use their ERP system as the hub for information and process improvement. Their top strategies to manage growth are listed below:
- Standardize business processes (44%)
- Streamline and accelerate processes to improve efficiency and productivity (33%)
- Optimize the use of current capacity (33%)
- Link global operations to improve interoperability and collaboration (28%)
- Provide visibility to business processes across functions and departments (17%)
- Provide timely information on critical decision-making data to front-line employees (17%)
Following these strategies for their ERP system enables best-in-class wholesalers and distributors to achieve operational results well above their peers. How does your organization compare to these best-in-class metrics?
- 3 days to close a month
- 97% complete and on-time delivery
- 98% internal schedule compliance
- 98% inventory accuracy
- 19% increase in profit margins over two years
- 40% decrease in time to decision
Best-in-Class Business Systems Practices
If your organization meets these criteria, you are among the best in the business; if your organization doesn’t achieve these results, you can learn from the practices of best-in-class companies. The Aberdeen research shows four practices that set best-in-class distributors apart from their peers.
- Provide visibility: Top performing companies are 97% more likely to provide information and process visibility throughout their organization.
- Integrate business systems: 81% of best-in-class wholesalers and distributors integrate their business systems both internally and externally.
- Enable mobile access: Best-in-class organizations are 119% more likely than other companies to provide mobile access to their business systems
- Measure performance: Top companies are 100% more likely to set goals and measure performance as a regular process.
In future blogs, we will address each of these four practices. We will discuss how wholesalers and distributors are using these capabilities to drive business success.
IWI specializes in helping organizations select and implement enterprise software and business systems that can lead to higher company performance. Our small and dedicated team specializes in helping small-to-medium size Canadian businesses and non-profits select and adapt Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Human Resource Management (HRMS), and IT services. With IWI’s 15 years in business and 100 plus years of combined experience, IWI has helped hundreds of food manufacturing, distribution, and financial service companies gain efficiency, grow, and lower their operating costs.
With the unique combination of industry knowledge and diverse technology expertise, IWI provides cost-effective solutions to help clients gain a competitive edge. As a Sage business partner servicing the Greater Toronto Area, we support evaluation and implementation of operations and finance systems to optimize technology, ensuring high return on investment with a quick and painless transition to new software. Contact us to learn how we can help your organization become best-in-class.